Oracle (NASDAQ:ORCL) reported a blowout quarter last night that has the stock up about 14% in pre-open trading. On last night's conference call, CEO Larry Ellison took the opportunity to let fly against competitor SAP, including a personal attack against its CEO Henning Kagermann:
We think Oracle’s current strategy is helping us overtake SAP and win market share. Let me start with the first key success factors for SOA applications, and that is middleware... SAP is sticking with a proprietary approach to middleware while Oracle has adopted a completely standards-based approach from middleware and our next generation of fusion applications.
As the market more deeply embraces service oriented architecture, SAP’s non-standard ABAP approach to middleware is hurting their sales and helping us win share...
SAP has good industry knowledge and products in some industries, like oil and gas, but they lack industry-specific knowledge and products in most other industries....
Oracle’s acquisition strategy has moved us ahead of SAP in several industries -- banking, telecommunications, retail, and so on. Oracle will continue to acquire industry knowledge and products. We believe that SAP must do the same, or SAP will become progressively less competitive in several industries and continue to experience slowing organic growth.
SAP’s CEO, Henning Kagermann, is now publicly talking about a more aggressive, and I quote: “a more aggressive acquisition strategy as a solution to SAP’s slowing organic growth.”
As I pointed out before, SAP has delayed their next release. The next release of their applications is in 2010....
Jason Maynard - Credit Suisse:
Larry, please follow up on a couple of the points you were making regarding competition against SAP. As you look out over the next year or so, do you see the share gains against SAP accelerating? Are you specifically still thinking that you are going to be taking share, perhaps not just only in the core markets but also in terms of the next generation middleware platforms around SOA?
Well, I think it’s hard for our share gains to accelerate. I mean, SAP’s growth in their most recent quarter was 8% and our growth in our last two quarters was over 80%, so I cannot imagine that our rate of gain will accelerate, but I think our rate of gain against SAP will stay very, very high. I think it includes gains in ERP, gains in CRN, and gains in industry-specific applications.
View entire Oracle F1Q07 Earnings Conference Call Transcript